Oped#2/17

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Microsoft’s public relations fiasco is a case study of how a powerful corporation can lose its credibility in the marketplace of public opinion because of a leaked secretive public relations campaign.

Recent news reports describe how a media blitz by Microsoft in 12 states was designed to gather grassroots support for the company by using local public relations firms to write and place covert opinion pieces and letters to the editor in targeted publications.

When initially asked about this campaign, Microsoft spokesman Greg Shaw said he was unaware of such a plan. He has since backtracked and acknowledged the campaign, but his credibility and Microsoft’s ? is now gone since he lied about it initially.

The campaign was being managed by Edelman Public Relations, a firm that has wide respect in the industry. Apparently, the public relations strategy was designed to make it look as though there was strong grassroots support for Microsoft in these states so that the company’s lobbyists could use the press clippings to influence the 12 state attorneys general not to file antitrust actions against the firm. It was also designed to appear that it was not connected to Microsoft and Edelman at all.

This followed the Justice Department’s antitrust investigation of the company’s business practices that was started in October. The department is looking into whether Microsoft is trying to monopolize the industry by forcing buyers of its software to use its browser.

If only Bill Gates had read his Encarta, he could have learned a lesson in reputation management from the Seedbed Era (1900-1917) in American corporate history. In fact, it was almost 100 years ago that saw the rise of mass-circulation newspapers and magazines.

In 1900 there were 50 well-known national magazines with circulations over 100,000, and the Ladies Home Journal, which was founded in 1883, had a circulation close to 1 million. The muckraking journalists of this era Lincoln Steffens, Upton Sinclair and Ida Tarbell used these national forums to rail against abuses of big business and corporations. This era also saw the rise of a practice of hiring former news reporters by large corporations to tell their side of the story to the public.

This period is seen as the first stage of the modern public relations practice. Ivy Lee, one of the pioneers and shapers of 20th century public relations, was one of the first practitioners who represented corporations in an honest and professional manner. This former journalist was the first to issue a “Declaration of Principles” that set the standards of modern public relations. He mailed it to all city editors and it read in part:

“This is not a secret press bureau. All our work is done in the open. We aim to supply news. This is not an advertising agency. In brief, our plan is, frankly and openly, on behalf of business concerns and public institutions, to supply to the press and the public of the United States prompt and accurate information concerning subjects which it is of value and interest to the public to know about.”

Lee was among the first public relations professionals to issue “press reports” to reporters on a large scale. He revolutionized the way publicity was done, especially as it related to businesses and the press. Among his clients were John D. Rockefeller Jr., who at the turn of the 20th century was a target of one of these muckrakers, Ida Tarbell. She wrote the “History of the Standard Oil Company,” which lambasted Rockefeller and Standard Oil. Lee was hired by Rockefeller to balance his public image, and he was largely successful because he was open and credible with the public and the press. Microsoft’s PR campaign goes against all of the professional standards that Ivy Lee set down in writing.

Bill Gates should learn from history and Microsoft’s public relations counselors should heed the advice of Ivy Lee’s “Declaration of Principles,” because the most important asset a company has is its reputation, and by not being open and honest, Microsoft’s reputation has been damaged.

David Silver is president of Silver Public Relations, an L.A. firm that provides public relations counsel to corporations and publicly traded companies.

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